After over four years of the crisis that erupted in 2019, the Lebanese economy is struggling to find the path to growth again. The persistent absence of the reforms necessary to attract foreign investments and encourage the development of productive sectors weighs on future prospects. Widespread resistance hinders the adoption of a plan for the allocation of financial losses and the management of default on sovereign debt, which would allow Lebanon to seek resources on international markets and restore the functions of its banking sector. In addition to the political risks associated with the evolution of the conflict in the Middle East following the Hamas attack against Israel on 7 October 2023.
Since 2019, Lebanese GDP has suffered a sharp contraction, essentially halving. Inflation remains very high (192% year on year, in 2023), as does public debt (over 180% of GDP at the end of 2023). However, we note the continuing vitality of the private sector, which – also thanks to remittances from the diaspora – is showing limited expansion.
In this context, Italy maintains its traditional market shares also thanks to the significant receptivity of the Lebanese market for Made-in-Italy products. An ITA office within the Italian Embassy premises, provides assistance and services to Italian economic operators. Further information, including analysis of the local context in terms of risks and opportunities, can be found here. Italian companies can also use the NEXUS platform to contact the Italian Embassy in case of need for assistance or interest in a cognitive meeting, while they can check on the ExTender portal the existence of international tenders and previews of large projects.
Support for Italian companies, with the aim of encouraging their growth abroad, is one of the priorities of the Ministry of Foreign Affairs and International Cooperation. Following the 2019 reform on international trade, the Italian Ministry of Foreign Affairs and International Cooperation exercises the functions of directing and controlling public funds that support the internationalization of Italian exporting companies: the 394/81 Fund, the 295/73 Fund and the Venture Fund Capital, managed by SIMEST and administered by inter-ministerial committees chaired by the Director General for the Promotion of the Country System. More detailed information can be found on the Ministry website.
Lastly, it is noteworthy to mention the creation of the Development+ fund, a new instrument of the Italian Cooperation dedicated to companies investing in emerging markets (including Lebanon), with a ceiling of up to 70 million euros. Through Development+, medium-long term financing will be granted to support participation in the risk capital of companies based in OECD-DAC partner countries thanks to the resources of the Rotating Fund for Development Cooperation. The investment must promote sustainable and inclusive development in the area of operation by promoting job creation, in compliance with international labor conventions.